EU countries have agreed on funding to move away from fossil fuels from Russia and invest more in renewable energy. The EU finance and economics ministers agreed on Tuesday to repurpose funds from the Corona recovery fund and to provide an additional 20 billion euros for investments in the energy sector.
The project is part of a proposal by the EU Commission from May, which EU Commission President Ursula von der Leyen described as “turbo” for the energy transition.
20 billion euros from innovation funds
Specifically, the ministers agreed that a large part of the grants of 20 billion euros should come from the EU’s innovation fund. A smaller part is to come about through an earlier auction of emission allowances than planned.
The EU Commission’s proposal to auction additional allowances from a reserve to raise money was rejected. It was feared that this would cause additional emissions. In emissions trading, for example, electricity producers have to buy certificates for the emission of climate-damaging gases such as carbon dioxide (CO2). Among other things, the extent to which countries are dependent on fossil fuels should be taken into account when distributing the money.
The approval of the EU Parliament is still pending
It was also determined that money from the Corona development fund can be used for energy purposes. The EU countries can change their corona construction plans for this, as can be seen from the notification from the states. The EU Commission announced in May that 225 billion euros in loans from the RRF Corona development instrument were still available. According to the announcement, the RRF can also be increased by transfers from other EU funds.
The EU Parliament still has to approve the project. Then the States and Parliament can negotiate it before it can come into force.
